The end of 2009 and start of 2010 has seen a burst of mergers and acquisitions across the marketing and technology space. Firms and their intellectual property are being consolidated at a rapid pace. The DMA reported today about several deals. These include acquisitions by Covario, Barkley, and Experian. Others of interest are the purchase or investment in such firms as Aggregate Knowledge, Balihoo, and Harland Clarke Holding’s investments in Protocol Integrated Marketing Services and SubscribeMail.
The obvious conclusion is that firms that have emerged from the recent downturn in a strong financial position are seeking to leap frog their competitors by adding technology to their portfolio. The consolidation of the market can be expected to continue over the next several years. The risk of development are obvious; management distraction, time to market, and hard costs are all very real issues. It is well documented that the vast majority of IT initiatives either fail completely or come in late and over budget.
The acquisition strategy makes sense. The core technology that many firms have developed have been littered with “me too” add on features, such as PURLs and Email that lack the functionality and ease of use of the core product. As customers seek the so called “Holy Grail” of the one source technology provider, the firm with the not only the most features, but the most useable set of features, will have a real competitive advantage in the cross media marketing space. The challenges of integrating a proven technology are not trivial, but they are surely less than development in house.